History
has been made. The Age of Austerity in the United Sates has begun.

What
does the new debt reduction legislation, whose protracted birth over
the past week portrayed Washington at its worst, mean for the United
States Postal Service?

Good
news and bad news. First the good news. Because the Postal Service
is "off-budget," (or
not part of the federal budget), the Postal Service is immune from the
punishing, arbitrary cuts imposed on the rest of the federal
government by the debt legislation -- the "Budget
Control Act of 2011". (The Postal Service went off-budget in
1989.)

The bad
news is that the debt legislation doesn't throw a lifeline to the
Postal Service, given its dire financial straits. Although the White
House
attempted two weeks ago to include the Postal Service in its
"grand bargain" proposal, those efforts failed.

All
this means that the Postal Service is back to
Code Blue. September 30 is approaching and the Postal Service is
showing every sign of refraining from writing the $5.5B check for its
retiree health benefit obligations that is due -- in order to stave
off insolvency.

Congress could yet throw a lifeline to the Postal Service sometime
this fall, but with a price, potentially involving legislation introduced
by Rep. Darrell Issa (R-CA), that would essentially throw the bankrupt
Postal Service into receivership.

Finally, does the debt legislation affect postal employees? Here
again, the answer is yes, but not
directly. Dreaded cuts in civil service retirement and health
insurance benefits themselves are not mandated by the debt
legislation. However, benefit cuts eventually are likely and are still
in the mix.

The
second stage of budget cuts mandated by the debt law -- coming
in December out of the Joint Committee's recommendations on $1.5
trillion in spending cuts -- could include proposals that have been
circulating for months. These could include increasing the employee
contribution for retirement, reducing retirement benefits by changing
the way those benefits are calculated, increasing employee
contributions for health insurance, and making cost of living
adjustments less generous for all retirees. There is a small glimmer
of hope: a White
House fact sheet on the debt legislation suggests that federal
pensions could be exempt from the across-the-board cuts that would be
triggered by the legislation if Congress fails to approve the Joint
Committee's recommendations.

Many in
Washington are still deciphering the perilous path of pitfalls created
by this new legislation. There are certain to be more brinksmanship
moments over further spending cuts down the road, though those moments
are unlikely to be as calamitous as a government default could have
been.

Looking
back on the past week, the Republic still endures, but with a black
eye, and a waistline about to begin a take-no-prisoners diet.

The National Association of Postal Supervisors has
warned key Senate and House leaders of potential abuse that may
occur in the Postal Service's administration of its
pay-for-performance system covering 75,000 USPS managers,
supervisors and postmasters. Such abuse, NAPS projects, could
result in a salary loss of at least $500 to $800 by each affected
employee, effective February 5.

In letters to the chairmen of the Senate and House
panels that oversee the Postal Service, NAPS President Ted Keating
warned, "Based upon anecdotal information learned by our members in
the field, we have reason to believe that lax enforcement by
upper-level management within the Postal Service of
pay-for-performance goals could arbitrarily reduce the performance
assessments and salary increases of an unspecified number of
management employees ... Any action by the Postal Service that
revises performance goals at the end of a performance period
unfairly moves the goalposts and undermines confidence in the
validity of pay-for-performance."

The Postal Service on February 5 is slated to provide
notification to each management employee of his or her 2009 increase
in base salary, based upon the attainment of pre-set performance
goals and objectives under the National Performance Assessment (the
USPS pay-for-performance system) for the 2009 fiscal year, which
ended September 30, 2009. Those performance goals have been set
through a negotiated pay agreement reached between the Postal
Service, NAPS and the two other management associations. The pay
agreement conditions a management employee's receipt of any annual
salary increase upon that employee's success in achieving or
exceeding the pre-set performance goals and objectives.

NAPS is strongly encouraging all its members and
other EAS employees who believe their performance goals to have been
wrongly adjusted, once they receive word of their salary adjustment
on February 5, to file an appeal through eRecourse, the USPS
internal appeal process. For Information on eRecourse and filing an
appeal, click here.

"eRecourse will be our member's first avenue of
appeal," Keating explained. "If any improper adjustment of pre-set
goals is not made right through eRecourse, we will go to Congress
for correction," he promised.

In recent letters to Sen. Tom Carper (D-DE)
and Rep. Stephen Lynch (D-MA),
Keating noted that NAPS has "received no assurance from the Postal
Service that it intends to follow-through and award salary increases
based upon the previously-set performance goals -- goals on which
management employees aligned their sights and worked hard to attain,
achieving some of the highest levels of service attained by the
Postal Service."

"While all postal managers and supervisors are deeply
concerned about the Postal Service's financial condition, the same
concerns did not dissuade the Postal Service from awarding
significant salary increases -- in the tens of thousands of dollars
-- to many of its executive-level employees during the past year,"
Keating added.

Postal IG Says USPS Overcharged by $75 Billion

The Postal Service's Inspector General has released a
study
finding that the Postal Service has overpaid the Civil Service
Retirement System by $75 billion over past years. The IG finding of
the USPS overpayment comes at a time when the Postal Service is
scrambling to find the money to cover billions of dollars in losses,
expanded by its future retiree health benefit obligations.

The USPS overpayment also marks the third time in
less than a decade that the Postal Service has been overcharged for
its pension obligations.

If Congress agrees that the overpayment exists and
approves the move of the overpaid monies from CSRS to the Postal
Retiree Health Benefits Fund, it would represent a huge windfall for
USPS.

As the OIG report notes, if "the overcharge was used
to prepay the Postal Service's health benefits fund, it would fully
meet all of the Postal Service's accrued retiree health care
liabilities and eliminate the need for the required annual payments
of more than $5 billion." Also, the health benefits fund could
immediately start meeting its intended purpose -- paying the annual
payment for current retirees, which was $2 billion in 2009."

Don't say lightning can't hit thrice. In 2002, after
years of suggestions by postal officials that it was being required
to overpay its pension payments, the federal government acknowledged
that the Postal Service was on pace to overfund the CSRS by $78
billion. Congress thought it had corrected that overpayment through
legislation in 2003. That same legislation, however, required USPS
to pick up the $27 billion tab for CSRS military service credits of
its employees. That $27 billion overcharge was subsequently
corrected by the 2006 postal reform law. And now, if the USPS-OIG
is correct, a third overpayment needs to be reckoned with.

Once again, the unnecessarily complicated and
sometimes irrational federal budget scoring rules will likely
suggest that the accounting transfer of the $75 billion overcharge
from the CSRS fund to the postal retiree health benefit fund
"scores" against the federal treasury, thereby contributing to the
deficit. That drives lawmakers up the wall.

For NAPS, that means Congressional budget scoring
rules should be waived or changed to restore common sense to how
Congress operates. NAPS delegates to the upcoming legislative
conference in March will send Congress this message: credit USPS for
the $75 billion CSRS overpayment and apply those funds to USPS'
retiree health benefit obligations. This will help to restore
financial stability to the Postal Service so that it continue to
serve all Americans with affordable, universal service.

Rep. Stephen Lynch (D-MA)
has introduced
a bill in the House of Representatives that would give greater power
to the Office of Personnel Management to bring lower prescription
drug prices to employee and retiree enrollees in the Federal Employee Health Benefits Program (FEHBP).
The bill, the "FEHBP Prescription Drug Integrity, Transparency, and
Cost Savings Act' (H.R. 4489) would
require changes in FEHBP drug pricing and contracting methods --
moves that the drug industry is opposing.

Lynch says his measure will ensure that "FEHBP is
providing our federal employees with the best value for their
prescriptions. Through strong oversight provisions that allow for
alternative prescription drug benefit contracting and pricing for
the FEHPB, my legislation will serve to enhance accountability and
transparency relating to the FEHBP drug prescription benefit." aims
to “ensure program integrity, transparency, and cost savings in the
pricing and contracting of prescription drug benefits under the
Federal Employees Health Benefits Program.”

If the level of opposition to Lynch's bill from the
drug industry corresponds to the real merit of the bill, there
should be no doubt about whether it should pass.

The bill zeroes in on pharmacy benefit managers (PBMs),
who aren't at all happy with the bill. PBMs serve as the middlemen
who negotiate drug benefits between the drug manufacturers and the
200 health insurance carriers that provide prescription drugs to the
8 million people covered under FEHBP. The Pharmaceutical Care Management Association,
which represents the nation’s PBMs, strongly opposes the measure.
Why? Because it would impose greater oversight of what PBMs can do
in FEHBP and probably crimp PBM profits.

Lynch held hearings last year that raised concerns
that FEHBP enrollees were paying 15 to 45% more for drugs than
federal military personnel, veterans and other participants in other
government health insurance programs. Lynch said at the time that
federal employees appeared to be "getting a raw deal on this plan,"
and said he would move to affect reforms.

One of those reforms contained in his new bill would
ban PBMs that own or are owned by pharmacy retailers from
participating in FEHBP. That would pose problems for CVS Caremark
Corp. (CVS), which is owned by CVS. Other parts of the bill would
ban drug switching in the program without prior physician approval,
impose new disclosure and transparency requirements and cap drug
prices paid by the FEHBP at the average manufacturer price. The
migraine-producer for the pharmaceutical industry, and especially
PBMs: a provision requiring PBMs to return 99% of all the oil that
greases their relationship wheels: rebates, market-share incentives
and other money received from pharmaceutical manufacturers for FEHBP
business.

NAPS strongly endorses the legislation. In
announcing NAPS' support, NAPS President Ted Keating said, "This
legislation provides the kind of health care reform that all postal
and federal employees, retirees and their families should expect.
OPM needs the power to make the FEHBP work better for all of us.
And we need greater integrity and transparency within the drug
industry if it deserves to participate in FEHBP. Chairman Lynch's
bill will make those things happen."

Send a message today to your House lawmaker to urge
support for H.R. 4489. Click here
to easily send that message to Congress.

Forward this update to your colleagues and friends.
If they would like to sign-up to receive future updates, sign-up here.

National Association of Postal Supervisors

Legislative & Regulatory Update

September 24, 2009

Postal Relief Added to Government Stopgap Funding Bill

House and Senate lawmakers have included emergency financial relief
for the Postal Service in a temporary government funding measure
awaiting House and Senate approval. A vote in the House is slated for
Friday, with the Senate to follow.

The
postal financial relief provisions -- identical to
H.R. 22, as approved by the House on September 15 -- are included
in a continuing resolution to keep government operations funded
through October 31. The continuing resolution is necessary to extend
government funding while Congress completes work on its twelve annual
government appropriations bills. In a complicated parliamentary
maneuver, the continuing resolution has been added to the
House-Senate conference report of the FY2010 Legislative Branch
appropriations measure.

The
Postal Service relief package contained in the CR reduces the size of
the pre-funding payment the Postal Service must make to the Retiree
Health Benefit Fund on September 30 from $5.4 billion to $1.4
billion. The reduction covers only the USPS pre-funding obligation
for Fiscal Year 2009, which ends September 30. No taxpayer funds are
involved, and the relief is not a "bailout." The Congressional Budget
Office previously indicated that H.R. 22 will not have an affect on
the Federal unified budget.

The
savings will provide assistance to the Postal Service in dealing with
significant financial problems brought about by the recession and
electronic diversion. Future legislation addressing USPS retiree
health benefit payments, as well as the underlying health benefit
prefunding arrangement, is likely in the months ahead.

====

PRC
Reviews Station/Branch Closures at Bronx Hearing

NAPS encouraged the Postal Regulatory Commission on Wednesday to
balance commercial and public interest factors in determining whether
to validate the Postal Service's initiative to close and consolidate
hundreds of post office stations and branches.

At a PRC field hearing on Wednesday in the Bronx, New York, NAPS
Branch 459 President John Vincenzi told the PRC in
testimony:

"The fundamental aim of my organization -- the National Association of
Postal Supervisors, as a mangement association of employees of the
Postal Service -- is to support the effective and efficient operation
of the Postal Service. As such, we are conscious of the tremendous
financial pressures the Postal Service faces. We are sensitve to the
heightened need for the Postal Service to reduce its costs, while
assuring universal service. This is not an easy task. It requires a
balancing of commercial and public service factors. This means that
the Postal Service must be guided not merely by how postal operations
were conducted yesterday, but how they need to be conducted in
financially responsible and public-minded ways today and tomorrow.
Where the consolidation of postal facilities makes commercial sense,
where service to the public will not be adversely affected, where
major mailers will not be inconvenienced, and where negotiated
agreements and statutory requirements have been satisfied, the Postal
Service should be permitted to proceed in undertaking consolidations
of its commercial retail network."

The PRC held Wednesday's field hearing in the Bronx, along with
another hearing last week in Ohio, to assist in its review whether to
validate the USPS effort to close hundreds of post office stations and
branches, called the "Station and Branch Optimization and
Consolidation Initiative." The latest list of post office stations
and branches under review is
here.

Bruce
Moyer

NAPS
Legislative Counsel

National Association of Postal Supervisors

Legislative & Regulatory Update

July
24, 2009

Postal Service
Emergency Aid Proposed in Senate

Legislation to provide
emergency financial relief to the Postal Service was
introduced in the Senate on Thursday and is expected to be
cleared by a Senate panel within days.

Like H.R.
22, a similar (but not identical) measure moving through
the House of Representatives, Carper's bill restructures the
Postal Service’s obligation to pay its retiree health
benefit payments, generating significant savings to the
Postal Service over the next several years. The Carper bill
also gives USPS more borrowing authority to meet its
financial obligations and get through this current fiscal
year and next.

Action on S. 1507, which is
expected to win backing from the White House, comes as the
Postal Service faces dire straits. Recently Postmaster
General Jack Potter and Postal Service Board of Governors
Chairman Carolyn Gallagher notified Congress and officials
at the Treasury Department that the Postal Service will not
make its $5.4 billion retiree health, pre-funding payment by
September 30, as required by law.

The Postal Service expects
mail volume to be roughly 175 billion pieces this fiscal
year, a decline of 38 billion pieces since 2007. The
Postal Service is also projecting a loss of $7.1 billion
in FY2009 despite achieving $6.1 billion in cuts in costs
in the past year.

In a statement released
on Thursday, Sen. Carper said, “The economic slowdown and
the ever-growing electronic diversion of the mail have put a
serious strain on our nation’s Postal Service." “We in
Congress must provide some way to help preserve the vital
services post offices provide for American families and
businesses.”

But Carper warned that his
legislation "is not a silver bullet that will fix
everything wrong with the Postal Service." He encouraged
USPS management to find ways to attract new business and
further streamline operations and said, "Congress and
postal employees need to continue to work closely with
management to keep the Postal Service running smoothly and
reliably.”

FERS Sick Leave Encounters Senate Stalemate

A Senate
amendment -- supported strongly by NAPS and other
federal employee groups -- that would allow FERS employees
to credit unused sick leave toward their retirement, as well
as effect other federal workforce reforms, was withdrawn on
Thursday after the amendment became subject to a filibuster
during Senate consideration of the fiscal
2010 Defense authorization bill.

Many
of the terms of the Akaka amendment had been approved last
month by the House of Representatives in its passed version
of the Defense authorization bill.

Sen.
Akaka withdrew his own amendment after Sen.
Tom Coburn (R-OK) indicated he would remain on the floor
and filibuster the amendment into the night. To avoid
protracted debate, Sen. Akaka withdrew the amendment and
indicated he would fight for its inclusion when the Senate
and House reconcile the final terms of the defense
authorization.

Coburn claimed that the Akaka amendment would generate an
"intolerable" increase in the benefits of federal employees
and contribute to a swelling federal budget deficit at a
time of when many Americans are unemployed. Coburn also
claimed that the amendment would cost $3.2 billion from 2010
to 2019, according to projections from the Congressional
Budget Office.

Also citing CBO numbers, Akaka argued that his amendment
would be a net gain for the government in the long term.

This is the second time that the Senate has killed the FERS
sick leave proposal during the current Congress, while the
House has passed it four times. Earlier this summer Senate
proponents sought to include it in tobacco legislation (as
the House had done), but stripped it from the bill after an
objection from Sen.
Jim DeMint (R-SC).

Bruce Moyer

NAPS Legislative Counsel

National Association of Postal Supervisors

Legislative & Regulatory Update

June 24, 2009

House Panel Approves Financial Relief for the Postal
Service

Congress began to open the spigot of emergency relief for the
Postal Service on Wednesday, when the House postal oversight subcommittee
approved legislation that would permit the Postal Service to realign
its payments for the health benefits of its retirees.

The relief is needed because the Postal Service, despite continued
cost-cutting, has projected losses of more than $6B this
year, due to the devastating impact of the economic recession.

On a voice vote, the Subcommittee on the Federal Workforce, Postal
Service and the District of Columbia unanimously approved an amended
version of H.R. 22, that permits the Postal Service to pay its obligations
to its current retirees by tapping into billions it has set aside
for future payments.

The Subcommittee permitted the Postal Service to realign its health
benefit payments for the next three years. The original version
of the legislation proposed eight years. The reduction in
the length of coverage under the bill was prompted by House fiscal
disciplinary rules and a Congressional Budget Office estimate that
pegged the bill as costing $12 billion, despite not using a single
dollar in taxpayer funds.

NAPS President Ted Keating indicated on Wednesday that NAPS will
continue to work to secure financial relief for the Postal Service
and gain approval of the amended bill by the full House Oversight
and Government Reform Committee soon after Congress returns from
its 4th of July recess. President Keating also extended his
thanks to Subcommittee Chairman Stephen Lynch (D-MA) and the panel's
top Republican, Rep. Jason Chaffetz (R-UT), along with Rep. John
McHugh (R-NY) and Rep. Danny Davis (D-IL), for their leadership
in moving the legislation ahead.

Keating also thanked the many NAPS members who have contacted their
House Members and helped to add 337 co-sponsors to HR 22.
No other legislation pending in Congress has as many cosponsors
and such bipartisan support.

The Postal Service's
Office of Inspector General poked another hole yesterday in the
unfair and burdensome requirements Congress imposed in the postal
reform law on the Postal Service and the payment of its retiree health
benefit obligations. Those obligations, in part, are causing the Postal
Service to go broke.

The Postal Service OIG announced yesterday that n a
June 19 report, based upon the work of its actuarial consultant,
the Hay Group, it found that the assumptions on how much the Postal
Service is required to pay for its future retiree health premiums
exceeds the correct amount, due to faulty assumptions by the Office
of Personnel Management has applied to future health care costs.

According to the IG report, the Postal Service could pay an average
$3.3B less each year over the next seven years and still achieve largely
the same prefunding of its retiree health benefits as required by
Congress in the postal reform law. The IG report validates the
approach pursued in H.R. 22, legislation that would reduce the Postal
Service's heath benefit retiree obligations over the next eight years.

The House postal oversight committee is
scheduled to markup HR 22 on Wednesday, June 24. But tt
is not certain that Subcommittee Chairman Stephen Lynch will push
for approval of H.R. 22 and its eight-year period of relief, due to
(questionable) cost projections by the Congressional Budget Office.

Questions about the validity and common sense of the CBO cost projections
are detailed in the following commentary appearing in the upcoming
July issue of The Postal Supervisor:

Cover Your Eyes: This May Be Messy

German Chancellor Otto von Bismarck
said, "There are two things you don't want to see being made: sausage
and legislation." He was referring to all the unappetizing ingredients
that find their way into a tasty wiener that may look great to the
eye, but less so if we knew from whence it came.

Bismarck's observation about the legislative process remains alive
today. A good example currently in Congress is a measure of strong
interest to NAPS members and the postal community. H.R. 22 has earned
bipartisan support and gained 321 co-sponsors, more than any other
measure in the 111th Congress. It was introduced in January, but,
since then, has encountered delays unrelated to its merits.

Despite H.R. 22's simplicity-the bill is fewer than two pages-common
sense in the congressional treatment of it has been discarded. Congress
has become the United States Sausage Factory.

H.R. 22 would permit the Postal Service to realign how it pays for
its retiree health benefits. It would allow the USPS to save $2
to $4 billion a year over the next eight years, while continuing
to make down payments for future benefits.

Sounds sensible, right? Well, the problem is use of a well-intended
congressional process called "budget scoring"-a method used to figure
out how much legislation will cost before it is passed. The scoring
problems with H.R. 22 have unfolded not once, but twice.

First, in 2006, as Congress prepared to pass postal reform, it created
the makings of the current problem through misguided actions based
on scoring. Congress offset the costs of postal reform by saddling
the Postal Service with an aggressive schedule of payments into
the newly established Retiree Health Benefit Fund (RHBF). To ensure
postal reform would score without cost, Congress tasked the USPS
with onerous payment obligations far more ambitious than any private-sector
employer wisely would take on.

That meant when the economy began to fall into a recession, the
Postal Service went into the red, to an extent because of the size
of the multi-billion dollar retiree health benefit payments it had
to make and continues to make. So, a fiscal charade for Congress
in creating an aggressive payment schedule set the stage for today's
scoring nightmare.

Scoring again is the culprit. This time, the Congressional Budget
Office (CBO) says H.R. 22 would cost $25 billion over the next eight
years. Cost who? The Postal Service? No. Ratepayers? No. Then who?
The "unified federal budget," CBO says. Because the Postal Service,
as a result of its retiree health benefit payment schedule being
relaxed, would be less inclined to seek further savings, thereby
imposing net costs to the federal budget.

Keep in mind the Postal Service is off-budget. Its operations are
not financed by taxpayer dollars. H.R. 22 does not use one penny
of taxpayer funds. It is not a bailout. H.R. 22 simply provides
a different time schedule for a pre-established, intra-governmental
payment to move money from one fund, the RHBF, to another, the Civil
Service Health Benefit Fund.

This is exactly the course of events Congress intended to begin
happening in 2016 under the postal reform law. It simply would be
occurring earlier, due to changed circumstances.

CBO's green-eyeshade logic yields a twisted result. According to
CBO, because RHBF assets are calculated in the total assets of the
federal government, tapping those retiree funds now would add to
the budget deficit.

And CBO further finds-and here's where the thinking really goes
off the rails-the Postal Service would not adequately offset that
amount of the deficit. Why? Because, the CBO predicts, the USPS
will take its foot off the cost-savings pedal once it begins to
be relieved of its financial obligations.

The truth is otherwise, given the huge financial challenges the
Postal Service faces and the significant cost savings in infrastructure
and labor costs the agency will need to continue to extract to make
ends meet.

So, what will emerge from the sausage factory in Washington? It
is difficult to say. If Congress disregards the illogical arithmetic
of CBO, it will pass H.R. 22. But if the bill becomes enmeshed in
budget politics this summer, the outcome may become, like so many
things postal right now, much more uncertain.

Bruce Moyer

NAPS Legislative Counsel

National Association
of Postal Supervisors

NAPS Legislative
& Regulatory Update

June 12, 2009

Senate Approves
TSP Reforms, but Drops FERS Sick Leave Fix

The Senate on Thursday
approved
landmark tobacco regulation legislation that includes several provisions
expanding federal employee options under the Thrift Savings Plan,
but does not allow
FERS-covered employees to count unused sick leave toward retirement savings.

The FERS sick leave
fix would correct an inequity in coverage between workers covered by the
older CSRS system and FERS and also encourage workers to save their sick
leave, creating management benefits and cost-savings.

Despite an appeal
to House Speaker Nancy Pelosi for a House-Senate conference by Rep. Ed Towns (D-NY)
and Rep. Stephen Lynch (D-MA),
the chairmen of the House committee and subcommittee that oversee the
federal civil service and Postal Service, the Senate bill (H.R.
1256)
appeared headed toward relatively quick approval in the House of Representatives,
then on to President Obama for signature.

How did this happen?
The House originally had approved
a similar tobacco bill in late March. That measure contained the
TSP reforms and the FERS sick leave provision. The House had melded
the dissimilar set of issues -- tobacco regulation and civil service benefits
-- largely because of the cash cow
created by one of the TSP provisions, one allowing federal and postal
employees to create Roth IRAs under the TSP umbrella. Because Roth
IRAs are taxable when contributions are made, the Roth IRA will generate
a huge windfall for the Federal treasury as federal employees set them
up and begin pouring money into them. The House tobacco bill would use
those Roth IRA revenues to offset the cost of FDA's new responsibility
to regulate tobacco, as well as pay for the cost of the FERS sick leave
arrangement.

The Senate, however,
included only the Roth IRA and other TSP provisions in its version of
the tobacco bill, causing the FERS sick leave and other federal employee
provisions to be subject to a procedural objection of germaneness successfully
lodged by Sen. Jim DeMint (R-SC).

The FERS sick leave
provision was contained in an amendment offered by Sen. Joseph Lieberman (I-CT),
that also contained provisions that would have made it easier for the
government to rehire federal retirees part time; modified how the CSRS
calculates annuity payments for employees who retire as part-time workers;
and moved federal employees in Alaska, Hawaii and U.S. territories from
cost-of-living adjustments into the federal locality pay system.
Approval of the Lieberman Amendment, because of Senate rules, required
the approval of all Senators, and DeMint would not budge.

TSP provisions remaining
in the Senate legislation included measures that would automatically enroll
federal civilian hires into the plan; enable employees to invest their
retirement money into mutual funds of their choice; allow enrollees to
create a Roth 401(k) so they do not have to pay taxes when funds are withdrawn;
and permit spouses of deceased federal workers to continue managing their
funds in the TSP. Current law requires spouses to withdraw those funds
60 days after their spouse passed away and reinvest them elsewhere.

The Senate outcome does
not mean that the FERS sick leave fix is dead, only that one vehicle for
its passage has left the station. NAPS will continue to work with
other federal and postal employee approvals for approval of the FERS sick
leave fix before the end of this session.

NAPS Sues the
Postal Service over Representation Rights

NAPS has gone into federal
court to challenge the determination of the Postal Service that the management
association is not entitled to represent supervisors and other managerial
employees in the Shared Services Center in Greensboro, North Carolina.

On June 9, NAPS filed
a motion in the United States District Court for the District of Columbia
requesting the court to enforce a prior court order originally issued
on February, 17, 1977, that provided NAPS with the legal right to represent
supervisors and other managerial employees of the Postal Service.

This action stems
from the establishment of the SharedServicesCenter in Greensboro,
North Carolina that consolidated some of the human resources activities
of the Postal Service into a single worksite. NAPS members began transferring
from the field to this central work location beginning in 2005 as their
positions in the field were eliminated and they followed their work to
the Greensboro facility.

The Postal Service
contends that the individuals at the SharedServiceCenter are not eligible
to be represented by NAPS because the facility reports to Headquarters.

In explaining
the legal action, NAPS President Ted Keating stated that NAPS has attempted
to resolve this matter through the consultative process, but the Postal
Service would not concur with NAPS' position despite the court’s original
decision in 1977 and the fact that other positions that were transferred
to headquarters reporting over the years maintained their rights to representation
by NAPS.

House Panel Approves
Voting by Mail in Federal Elections

Support for voting by
mail got a big boost in the House on Wednesday when a House panel approved
a set of election reform bills, including one supported by NAPS that would
allow voting by mail in all federal elections.

The measure, the "Universal
Right to Vote by Mail Act" (H.R.
1604)
guarantees the right of any eligible voter to vote "no-excuse absentee"
in a federal election. Currently, 22 states and the District of Columbia
restrict an eligible voter’s ability to vote by mail, some of them imposing
doctor’s note, notary and privacy information requirements.

The vote by mail bill
was one of three election reform bills approved by the House Administration
Committee and sponsored by Rep. Susan Davis (D-CA).
Another, "The Absentee Ballot Track, Receive and Confirm (TRAC) Act (H.R.
2510),
would provide grants to states to establish absentee ballot tracking systems
to assist voters to easily find out, online or through an automated phone
system, whether an elections office has sent out a ballot, whether a completed
ballot has arrived back at the registrar’s office and whether the ballot
was actually counted. Rep. Davis worked with Rep. Kevin McCarthy (R-CA)
in sponsoring the absentee ballot tracking measure.

"Democracy flourishes
when all Americans have a fair chance to participate in elections and
have confidence that the process is fair, Rep. Davis said in a statement.

Obama Picks McHugh
for Army Post

The House of Representatives
is set to lose one of its most experienced and knowledgeable lawmakers
on the operations of the Postal Service. President Obama on June
2 announced
his plans to nominate Rep. John McHugh (R-NY)
as Secretary of the Army. McHugh would be the third top-ranking
Republican to join the Obama Administration. The ranking GOP
member on the House Armed Services Committee, McHugh has represented upstate
New York's 23rd District for nine terms. His district includes FortDrum, where the Army's
10th Mountain Division is based.

The sixty-year old lawmaker,
known to many in the postal community as the "Father of Postal Reform,"
fought for over a dozen years in the House of Representatives for legislation
to modernize the Postal Service and liberalize postal ratemaking processes,
ultimately resulting in the passage of the Postal Accountability and Enhancement Act
in December 2006.

Known for his ability
to reach across the aisle and bridge partisan differences, as well as
his seasoned understanding of the postal industry, McHugh's departure
could be quickly felt in the Congress on postal issues. Over the
last six months he has championed legislation, H.R. 22,
to provide financial relief to the Postal Service.

A Congressional source
indicated that McHugh's Senate confirmation hearing for the Army post
could occur before the start of the August recess.

The House postal oversight subcommittee yesterday
postponed approval action on emergency legislation to provide
financial relief to the Postal Service. The delay is
due to continued wrangling by Congressional supporters of
the relief legislation with the Congressional Budget Office
over how much the postal legislation will actually cost.

Lynch
also indicated that modifications to HR 22 were likely at
markup, with the addition of requirements conditioning assistance
on the financial condition of the Postal Service, its efforts
to cut costs, and the absence of unfunded liabilities -- and
the possibility of a shortening of the assistance period to
one that's less than eight years, as the bill proposes.

HR 22 would ease
the Postal Service's payment schedule for health benefits
for its 400,000 retirees, permitting the Service to begin
now to tap a trust fund intended for the payment of future
retiree health benefits, instead of waiting until 2016,
while still requiring the Service to make payments into
the fund.

If Congress doesn’t pass HR 22 by September 30, the end
of the fiscal year, the Postal Service says it will be unable
to make its full annual contribution — $5.4 billion — into
the trust fund. “We would run out of cash. ... There
becomes a choice when you’re at the brink of insolvency:
Do you pay employees, do you pay suppliers, or do you not
pay this $5 billion?” William Galligan, USPS Senior Vice
President of Operations, told Congressional lawmakers yesterday.
“We break the law by not paying that. Not a place we want
to be at.”

The wrangling over the costs of HR
22 grows out of the assessment of the Congressional Budget
Office that passage of HR 22 would prompt the Postal Service
to ease off its vigorous efforts to cut operational costs,
thereby creating new USPS shortfalls. CBO's
views are opposed by a host of critics, including House
lawmakers, postal employee organizations, mailers, and USPS
itself, all contending that the Postal Service cannot afford
to give up its efforts to continue to find cost-savings.
They also point to the fact that the HR 22 fix relies entirely
on the use of Postal Service's own funds -- not taxpayer
monies -- representing an intra-government payment.

In the meantime, widespread support
for HR 22 among Democratic and Republican lawmakers in the
House of Representatives continues to swell, with 315 cosponsors
of the legislation.

Click here to check if your House Member has become
a cosponsor of HR 22. If your House Member has not
yet signed-on as a cosponsor,
click here and send them a message (it's easy to do),
urging them to support this critical measure.

Congressional Interest
in Five-Day Delivery Begins to Grow

Reluctant support among
pivotal House lawmakers for a cutback in mail delivery to
five days a week appears to be growing, a hearing by the
House postal oversight panel revealed yesterday. But Congress
is unlikely to embrace the five-day move until it has a
clearer understanding of how much the move would actually
save.

Postmaster General Jack
Potter in January first
proposed a seasonal transition to five-day delivery,
suggesting that a reduced delivery schedule made sense during
the lower-volume summer months. Since then,
and in light of its
deteriorating financial condition, the Postal Service
has sought a more permanent move to five-day delivery operations,
contending it could generate as much as $3.5 billion in
annual savings. The Postal Regulatory Commission in
a
December 2008 report estimated savings of only about
half as much, predicting that it would yield $1.9 billion
and cause mail volume to decline.

"The only way we'll embrace
it is if we have no other choice, and we're getting to that
point," said Rep. Stephen F. Lynch (D-MA), chairman of the
House postal oversight committee, said at yesterday's hearing.

Del.
Eleanor Holmes Norton (D-D.C.) asked for an independent
assessment of the savings, saying "I would seriously consider
it if we had an independent study showing that it would
make a structural difference." Rep. Gerry Connolly
(D-VA) acknowledged that the post office that our grandparents
knew may not be the post office that is needed by their
grandchildren.

William Galligan, USPS Senior
Vice President of Operations,
told the subcommittee that the Postal Service is facing
the most significant challenge of its history and said that
even a move to five-day delivery would not be enough to
bridge the financial gap between revenues and expenses,
requiring structural solutions, including the closing and
consolidation of mail processing and other facilities.

Phillip Herr, Director of Physical
Infrastructure Issues at the Government Accountability Office,
said that USPS can streamline its retail network by
closing unnecessary post offices and promoting lower-cost
alternatives. He also said that GAO may have to consider
adding the Postal Service to its High Risk list.

For a good summary of the hearing,
prepared by the Association for Postal Commerce,
click here. The statements of all hearing witnesses
are
here. Media coverage is
here and
here.

Bruce Moyer

NAPS Legislative Counsel

National Association
of Postal Supervisors

NAPS Legislative & Regulatory
Update

May 15, 2009

Postal Worker Benefit Cuts in the Works?

Although the Obama Administration has pulled
the plug on initial proposals to bring postal service employee benefits
in line with those of federal workers, it has signaled that it has not
backed off of interest in potentially reducing postal employee benefits.

Kenneth Baer, spokesman for the Office of
Management and Budget, told the
Wall Street Journal on May 10 that the Administration is reviewing
USPS worker benefit policies and that "[a] more comprehensive package
of reforms will be coming down the pike."

In March, the White House, as part of a preliminary
Fiscal Year 2010 budget document, proposed requiring postal workers to
pay 27% of their health insurance costs, the same as civil servants and
up from the current level of 17% that postal workers currently pay.
The plan also called for postal employees to begin paying 67% of their
life insurance premiums, just as feds do.

The White House, however, dropped its initial
USPS benefits reduction proposal after postal unions complained that changing
the benefit payment levels would violate collective bargaining agreements,
which mandate the benefit levels, at least for covered workers, and run
through 2011. More recent detailed White House FY 2010 budgets did
not propose a USPS employee benefits adjustment.

The Obama preliminary budget proposal projected
government savings of $752 million in fiscal year 2010, or $9.4 billion
over the next decade by reducing USPS worker benefits.

NAPS and other postal employee groups will
continue to monitor these developments very closely.

When Will HR 22 Move?

There still is no definite
word on when and how Congress will begin to move legislation to provide
critical financial relief to the Postal Service.

Action could begin in
the House of Representatives as early as May 20, when the
House postal subcommittee is tentatively slated to hold a business
session to mark-up pending legislation. At that time, the subcommittee
could consider
HR 22 or a variation of the bill. Plans on the timing and shape
of the postal legislation, according to subcommittee sources, are still
in flux.

HR 22, which already
has attracted 302 cosponsors, would provide $25 billion in savings to
the Postal Service by allowing it to pay premiums for current retiree
health benefits with funds it has already set aside for future retiree
health benefits, while still continuing to make pre-payments for future
benefits. The Congressional Budget Office contends, however, that
HR 22 will be costly to the federal government and contribute to an unfunded
government liability.

NAPS and other postal
employee organizations last month
wrote to House postal subcommittee chairman
Rep. Stephen Lynch (D-MA), contesting CBO's and scoring approach and
urged prompt action on HR 22, which would provide critical financial breathing
room to the Postal Service. The Postal Service has incurred net
losses in ten of its last 11 quarters, and
announced on May 6 that it had ended its second quarter with a nearly
$2 billion loss, largely due to the economic recession.

Click here to check if your House Member has become a cosponsor of
HR 22. If your House Member has not yet signed-on as a cosponsor,
click here and send them a message (it's easy to do), urging them
to support the legislation.

House
Panel to Examine Postal Operation Downsizing

The Postal Service is
expected to announce its latest thinking on plans to cut operations and
network costs on Wednesday, May 20, when the
House postal oversight subcommittee holds a hearing on the hard choices
and tradeoffs that underlie the preservation of the nation's mail system.

The hearing, "Nip and
Tuck: The Impact of Current Cost Cutting Efforts on Postal Service Operations
and Network," will be held by the House Subcommittee on Federal Workforce,
Postal Service and the District of Columbia, chaired by
Rep. Stephen Lynch (D-MA).

According to the Subcommittee,
the hearing will focus on: "What are the hard choices and tradeoffs that
need to be considered as mail volume declines significantly? What
options should be considered to overcome barriers and facilitate the Postal
Service in making significant progress in “rightsizing its networks?”
How much cost does the Service need to take out of its network and operations
to remain solvent and how will it be achieved? What impact, if any,
will cuts have on service?"

William P. Galligan,
USPS Senior Vice President, Operations, is expected to testify, along
with witnesses from GAO, mailers, and postal employee organizations.

USPS
Summer Sale Could Generate Hot Revenue

The Postal Service is awaiting the go-ahead
from the Postal Regulatory Commission to proceed with the most expansive
exercise of its pricing flexibility since Congress enacted the postal
reform law in 2006.

By mid-June the Postal Service is likely
to learn from the PRC whether it may permit high-volume mailers to receive
a 30% rebate on advertising mail they send through the postal system from
July through September.

The USPS "Summer Sale" pricing initiative,
which could generate as much as $95 million in additional revenue for
the Postal Service, responds to the disastrous downturn in USPS finances
and mail volume brought about by the recession and the fact that mail
volume is typically lower during the summer months.

The USPS "Summer Sale" proposal to the Postal
Regulatory Commission is
here.

The district
office consolidations are part of a series of measures responding to the
economic recession that has rocked Postal Service revenues. As a
result of the recession, mail volume will likely plunge from 212 billion
pieces in 2007 to 180 billion pieces by September 30, the end of the current
USPS 2009 fiscal year.

The Postal Service agreed to announce on April 28, 2009
its Phase One postings in connection with the abolishment of District
Office positions and to identify all positions available for bidding prior
to that date.

The Postal Service
also agreed to comply with all legal requirements of the reduction-in-force
(RIF) process, including notice to all impacted employees in the RIF-
avoidance and RIF processes. The Postal Service also committed to
provide NAPS with sufficient information and briefing as these actions
move forward.

House Approves
FERS Sick Leave Credit, TSP Reforms

NAPS scored
a victory on Wednesday when the House of Representatives approved a change
in civil service laws that would award credit to FERS-covered employees
for unused sick leave in the calculation of their retirement benefits.

The new approach will provide an incentive to FERS-covered
employees to conserve their sick leave, rather than use it up as they
near retirement. This in turn will achieve management savings and promote
productivity, to the tune of $68 million a year.

Unlike CSRS-covered employees, FERS-covered workers have
worked under a use-it-or-lose-it sick leave rule since the creation of
FERS, effective January 1, 1987.

The provisions of the Federal Retirement Reform Act of
2009, H.R. 1804, were also added to a second measure,
The Family Smoking Prevention and Control Act, H.R. 1256,
passed by the House on Wednesday. That legislation provides the
Food and Drug Administration with wider authority to regulate tobacco
products. Adding the provisions of the Federal Retirement Reform
Act ensures that the tobacco control bill is fully paid for and does not
increase the deficit.

The TSP-related provisions that additionally were approved
by the House would:

-- Enroll new employees automatically in the Thrift Savings
Plan;

-- Create a Roth Individual Retirement Account option for
TSP participants. The Roth IRA option, which has been in use in
the private sector for a number of years, allows employees who make after-tax
contributions to withdraw money tax-free upon retirement. The after-tax
character of the Roth IRA will generate huge immediate revenues to the
Treasury, providing a funding source for the FERS sick leave credit provisions
and the tobacco regulation bill.

-- Remove rules that penalize CSRS employees for working
part-time at the end of their careers and allow FERS employees returning
to government, possibly after a stint in the private sector, to reinvest
their retirement savings and claim credit for previous service (originally
HR 1198, the Part-Time Federal Employees Equity Act);
and

-- Allow an individual who has returned to government
service and who has received a refund of retirement contributions under
FERS to deposit the amount that was received, with interest, to the credit
of the Civil Service Retirement and Disability Fund (originally
HR 928, the FERS Redeposit Act).

NAPS President
Keating called upon the Postal Service to strip away top levels of management
and take other cost-cutting moves, during testimony before a House subcommittee
on Wednesday.

His comments
came during a hearing of the House federal workforce and postal oversight
subcommittee on the financial crisis facing the Postal Service, at which
Postmaster General Jack Potter warned that, unless the Congress provides
financial relief, the Postal Service will run out of money by the end
of the year, September 30.

Potter
urged Congress to approve changes that would save billions of dollars
in the way the Postal Service pays for its retiree health benefits and
authorize USPS to move to five-day delivery.

Keating
joined the call for urgent action on HR 22, which would permit USPS to
pay its current retiree health benefit costs differently, but went further
and pointed to ways that the Postal Service could cut significant costs
and improve operations.

He urged
the Postal Service to consolidate its nationwide management structure
from ten geographic areas to five, calling the current framework "far
too large, bureaucratic and costly to be allowed to continue to exist."

"By reducing
and consolidating its top management structure, the Postal Service would
eliminate needless bureaucracy, save costs, and operate more efficiently,"
Keating said. "It is time that the Postal Service apply the same
rigorous cost-cutting scrutiny to the numbers of its upper ranks as it
is applying to middle and lower-management." Keating's call came
after the Postal Service last week announced the closure of six district
offices and the elimination of 1,400 processing supervisor and management
positions.

Keating
also criticized the Postal Service's practice of buying the homes of relocated
employees and called for the end of the practice. "Recruitment and
retention incentives can be provided through sufficient other means, without
the need for home purchases that cause the Postal Service to rack up significant
losses," Keating said.

Additionally,
Keating took aim at the practice of USPS district managers detailing supervisors
and managers to positions that, Keating said, don't officially exist in
the USPS personnel structure. Keating said the practice, which involves
hundreds of supervisors in ad hoc positions,
is costly and harms productivity. "This is only one of numerous
problems that NAPS and the postmaster organizations have raised with USPS,
in light of the savings and management efficiencies that could be secured.
Like so many of our recommendations, they have been ignored by USPS top
management," Keating said.

Over 600
NAPS leaders will converge on Washington this weekend for the NAPS Legislative
Conference and Training Seminar, followed by meetings on Capitol Hill
on Monday and Tuesday with lawmakers to press NAPS' legislative agenda.

"There
has never been a more critical time for postal supervisors and managers
than now," said NAPS Executive Vice President Louis Atkins. "Our
mission is to convince Congress of the need to put the Postal Service
back on track."

NAPS members
will promote the passage of HR 22,
financial relief legislation for the Postal Service, along with several
other measures advancing Postal Service and NAPS member interests.
The NAPS Legislative Agenda is covered in the NAPS Legislative Issues Brief.

The
latest take on the financial health of the Postal Service will occur on
Wednesday in Washington, as the House postal oversight subcommittee
hears from the Postmaster General, the USPS Board of Governors and other
witnesses, including NAPS, on what to do, as the nationwide economic downturn,
coupled with technological trends, continues to generate declining mail
volumes and revenues.

The
hearing entitled, “Restoring the Financial Stability of the U.S. Postal
Service: What Needs to be Done?” is the first to be convened by the postal
subcommittee's new chairman, Rep. Stephen Lynch (D-MA).

Witness testimony, the
Chairman’s opening statement and the live broadcast of the hearing, starting
at 10 am EDST, can be found on the Subcommittee’s website.

“With
the Postal Service facing budget shortfalls the Subcommittee will consider
a number of options to restore financial stability, and examine ways for
the Postal Service to continue to operate without cutting services,” Lynch
said in a statement.

“Given
the ongoing financial losses at the Postal Service, there has been a considerable
backlash among postal customers and current and former employees regarding
the Postal executives’ compensation packages, including that of Postmaster
General Potter. Members of Congress have been hearing from our constituents
and we intend to look into this matter at the hearing and ascertain how
those pay levels were determined and how to bring them in line with the
current reality,” added Lynch.

--
What will likely come next in USPS attempts to cut costs, after the
Postal Service's announcement Friday
of the first big nationwide wave of facility consolidations and job cuts,
including the elimination of 1,400 management and supervisory positions
and the offering of early retirement to 150,000 employees; and

Over
600 NAPS leaders will converge on Washington this weekend for the NAPS
Legislative Conference and Training Seminar, followed by meetings on Capitol
Hill on Monday and Tuesday with lawmakers to press NAPS' legislative agenda.

"There has never been a
more critical time for postal supervisors and managers than now," said
NAPS Executive Vice President Louis Atkins. "Our mission is to convince
Congress of the need to put the Postal Service back on track."

NAPS
members will promote the passage of HR 22, financial relief legislation
for the Postal Service, along with several other measures advancing Postal
Service and NAPS member interests. The NAPS Legislative Agenda is
covered in the NAPS Legislative Issues Brief.

As questions continue
to swirl in Washington whether the economic stimulus package was too big,
too small or just right, no one disputes the wisdom of what Congress did
three years ago in its passage of the postal reform law, requiring
the Postal Service to set aside funds each year to assure the future payment
of postal retiree health care premiums. The good sense in what Congress
did in establishing the Postal Service's Retiree Health Benefits Fund
and requiring USPS annual pay-ahead payments into the Fund was underscored
yesterday, when USA Today
led with a front-page look at how state and local governments have pretty
much failed to set aside any money to pay for at least $1 trillion
in medical benefits to retired civil servants.

States have $445 billion
in unfunded obligations to help retirees pay for health insurance, and
local governments have obligations that surpass the $500 billion mark.
Governments may now be forced to cut benefits or raise taxes in order
to deal with the issue. (No federal agency is required to make payments
for the health care costs of its future retirees, as the Postal Service
is.

In comparison, the Postal
Service is required under the Postal Accountability and Enhancement Act
to make an annual payment between $5.4 to $5.8 billion, from 2007 to 2016,
into the Retiree Health Benefits Fund to cover future retiree health
care costs. This helps to assure that the money will be there, when
the time comes, regardless of the Postal Service's financial picture,
to satisfy its health care obligations to its retirees. Already,
there is over $32 billion in the Fund. Additionally, USPS makes
a separate annual payment to the Office of Personnel Management for its
current retiree health benefit premiums, of about $2.3 billion.

The problem -- where Congress
went wrong -- is that the USPS payment schedule that Congress set in 2005
was based upon the then-current economic conditions -- reflecting a health
economy and a healthy USPS -- and not the deep recession of today,
which has cratered USPS.

That's why HR 22, which would afford reasonable
financial relief to the Postal Service, would permit USPS to make its
payments for current retiree health benefit premiums out of the Retiree
Health Benefit Fund. This accelerates the approach that is already
envisioned in the PAEA after 2016.

Cut Postal Services, Don't
Hike Stamp Prices, Americans SayA new Gallup Poll reveals that a majority
of Americans prefer cutbacks in postal service, such as ending Saturday
mail delivery and closing post offices -- to either government assistance
or higher stamp prices. (The US Postal Service announced on February 10 new
postal rates for 2009 including a two-cent increase in the price of a
First-Class Mail stamp to 44 cents. Prices for mailing services are reviewed
annually and adjusted each May. The new prices will go into effect Monday,
May 11.)

According to the recent
Gallup poll results, Americans --whether they later regret it or not --
seem willing to forgo some of the Postal Service conveniences they have
become accustomed to, as opposed to paying to keep those services directly
(through higher stamp prices) or indirectly (through taxpayer funds).
This is an attitude shared widely by Americans of nearly every demographic
or attitudinal characteristic, Gallup says. With only 27% preferring government
assistance -- something the post office has not received since 1982 --
and 14% preferring significantly higher stamp prices, Americans appear
more than willing to give up some of the conveniences the Postal Service
has long offered, including six-day-a-week delivery and thousands of local
post office branches. It is possible the limited support for government
funding of the Postal Service may reflect concern over the vast amounts
of money Washington is spending in an attempt to revive the economy and
help out struggling industries. The poll provides some support for this
idea, as those who said they were "very closely" following news about
the economic stimulus plan Congress was debating favored cuts in postal
services over government funding by a 43-point margin (64% to 21%). That
compares to a smaller 25-point margin (54% to 29%) among those who were
less attentive to the stimulus debate.

Bruce Moyer

NAPS Legislative Counsel

NAPS Legislative/Regulatory Update
- Feb. 11, 2009

National
Association of Postal Supervisors

Attempts to Secure USPS Pre-Funding
Relief Continue

Effort to pass
HR 22, to provide critical financial relief to the Postal Service
through the recalculation of its future retiree health premium payments,
continues in the House of Representatives.

NAPS members have been urging their House lawmakers to cosponsor
HR 22, which provides eight years of pre-funding relief to the
Postal Service between now and 2016. To send a message to your
lawmaker to urge them to support HR 22,
click here.

HR 22, introduced by
Rep. John McHugh (R-NY) and
Rep. Danny Davis (D-IL), would permit the Postal Service to begin
to pay its retiree health premiums out of the retiree health benefit
trust fund -- to which the Postal Service has already deposited $32
billion. Ultimately, the Postal Service will pay $107.5 billion
into the fund by 2016, under the postal reform law.

NAPS supports
HR 22 because it would help pay for $2.3 billion of the Postal
Service's current retiree health care obligation this year -- rather
than require use of current operating funds. This would not
interfere with the health care that current and future retirees receive
or their own premium payments. It would simply cut to the chase
and accelerate a provision in the postal reform law that calls for
USPS premium payments to start being drawn from the retiree health
benefit fund after 2016, from which the Postal Service will make annual
payments of $5 to $6 billion.

A hearing by the House postal oversight subcommittee on HR 22 and
the USPS financial picture is likely sometime in the coming weeks.
Rep. Stephen Lynch (D-MA), who was elected last week by the House
leadership to the chairmanship of the postal oversight committee,
will preside at that hearing for the first time. Lynch, the
five-term Congressman from the South Boston/Brockton area, has been
active on postal issues. During the last Congress he introduced
HR 4236, curtailing USPS use of contracting-out of mail delivery.
The Massachusetts Congressman knows postal issues from the real-world
perspective. His mother, Ann Lynch, was a postal clerk,
and other relatives have postal roots.

FERS Sick Leave Measure Dumps Use-It-Or-Lose It Approach

Legislation jettisoning the “use-it or lose-it” approach toward sick
leave for FERS workers has once again been introduced in the House.
This year’s bill, though, is much better than last year’s proposal.

The new measure,
The FERS Sick Leave Equity Act, HR 958, introduced by
Rep. James Moran (D-VA) and
Rep. Frank Wolf (R-VA), will apply the same sick leave policy
to employees covered under FERS as to employees under the CSRS.
Under Moran’s proposal, accrued sick leave at the end of a federal
or postal career will be added to the years of service an employee
has worked. Because these years of service are used to calculate
retirement benefits, the financial payoff will be better. Retiring
FERS employees who hold on to their sick leave will get more in retirement
benefits each year.

NAPS has endorsed the Moran bill and will work hard for its passage.
NAPS members at the upcoming LTS will hit the Hill in search of cosponsors.
In a
letter to Representative Moran, NAPS President Ted Keating thanked
the Virginia lawmaker for his valuable efforts in introducing the
measure, noting that it provides real incentives for federal and postal
employees under FERS to retain their sick leave at the end of their
career, rather than use it. “This uneven approach [between FERS
and CSRS sick leave policies] fails to sufficiently discourage the
use of sick leave by FERS employees during the period leading up to
retirement,” Keating told Moran. “Your legislation will balance
the scale and provide the tools for improved management of the federal
and postal workforce, yielding greater productivity and cost-savings.”

Postal Service and civil service employees under FERS will be attracted
to the Moran measure because of the fairness it provides in how sick
leave is treated and for the boost it gives to their pensions when
they save their sick leave. Congress will be attracted to the
Moran measure for a different reason, namely, the gains to the government
when employees retain their sick leave, rather than use (or abuse)
it. Greater productivity should come about, through employees
being present to perform their jobs, rather than leaving the work
to others. This should help to save dollars, improve morale
and create a better workplace.

There is no doubt that the difference in how sick leave is treated
under CSRS and FERS creates distinguishable trends in its use among
workers nearing retirement. FERS employees who receive no value
for their unused sick leave will use that leave rather than simply
forfeit it back to the government at retirement. The Congressional
Research Service last August found that FERS employees who were eligible
to retire or approaching eligibility generally used more sick leave
than their CSRS counterparts. Independent reports by the Treasury
Inspector General for Tax Administration and the Bureau of Prisons
also confirmed that FERS employees were more likely to use sick leave
than CSRS employees at the time of retirement.

The savings that can result through abandonment of the use-it-or-lose
it approach toward FERS sick leave are considerable. The Office
of Personnel Management estimated in a May 2006 report that the lost
productivity caused by the increased use of sick leave by FERS employees
who were eligible or nearly eligible to retire cost the federal government
$68 million on an annual basis, based upon available data between
April 2005 and March 2006.

Last year, the House passed
HR 1108, a bill regulating the use of tobacco, which included
a provision to provide 75% credit for accrued sick leave for three
years following enactment. Although there was broad support for the
bill in the House, the measure did not move in the Senate because
of the controversial tobacco provisions. This year’s FERS sick
leave measure is a stand-alone bill, without the tobacco provisions.

(December
4, 2008) This is intended as a heads up to all Managers and Supervisors
of Customer Service in level 21 and below Stations and Branches who have
the understanding that the unit portion of the FY 2008 is based on the
performance of the city as a whole. In FY 2008 as well as FY 2009
this is not true. This can cost you several thousand dollars from your
PFP payout this year alone. This may seem complicated but check
it out. Call me if you need help walking through it. It will
be worth your time.

I have
discovered that, in many/most cases, when we confirmed our profile in
PES, way back in September and October of 2007 for FY 2008, the unit level
was changed from the previous year’s “Post Office EAS 26-21”.to read “Level
21 Station and Branch”. In most cases there was no notification
of the change and when we confirmed it in PES it appeared correct and
went un-noticed. I have found no instances where the impact of the
change in the unit designation was explained to those affected.
I will try to explain the consequences of this event and recommend action.

If you
managed your operation selflessly the entire year it’s possible that your
numbers may not be as good as the station you helped. When you short
staff your window the revenue you may lose by people going to a station
without a line will end up coming out of your paycheck. When you
give away carriers and end up working more expensive overtime hours in
your office your TOE is adversely affected and therefore your paycheck.
When you “take one for the team” and take on a station that performs poorly
(we’ve all got one like that) the resulting poor numbers result in a smaller
pay raise for you. Everyone is willing to take the “easy” station
with good performance and great revenue. Do the rest just suffer?
Did you understand in the beginning of the FY that you would work as team
toward all goals except the one over which you had direct control; your
core goals?

To determine
if this is affecting you go to the NPA website and compare what is available
to you. The site can be found by typing “NPA” in the address bar.
Go to reports and on the left select “Report Card Detail”. See how
far down you can drill when you select September of FY2007. You’ll
find you can only go down to your city…which you knew. Now select
September FY2008 and in the “Org Level” you’ll see that you can drill
down to C/S Station/Branch. Take a look at the difference in the
Unit Summary for the different stations within your city. Compare
the NPA composite Summary, your score before the cores are calculated.
What you will find is that some stations vary a great deal from the number
that would have been achieved with the Post Office or city score designated
as the unit.

Here’s
what I recommend: If you are under the impression that you were working
together as a team toward unit goals, immediately send a request for information
to the Postmaster or MCSO. Request a copy of the screen that indicates
each of his direct report’s NPA Composite Score. (This will be very close,
within a few hundreds, to the score you see on the report card detail
report). If you find these scores are different, and most of you
will, I suggest the local president file for mitigation on behalf of the
city EAS based on the fact that it was not explained that the rules had
changed. While it will likely be rejected because you can’t prove
a 1 box change, it will serve as notice that you tried to address the
problem before the mitigation deadline of December 12.

Yes I
said December 12!! Even though you aren’t supposed to know what
your rating is until January 17, 2009, the dead line for mitigation to
go through the process and be at headquarters is December 12. Seems
like a Catch 22 doesn’t it?

Headquarters
is addressing this in the December consultative and I have been asked
to present support on the issue to them. I hope to be successful
in clearing this up. Please feel free to call me to walk you through
the NPA screens or the mitigation process.

Sick Leave Removed
as NPA Core Goal for EAS EmployeesDecember 1, 2008
– Through the effort of NAPS in the Consultative Process and the cooperation
of The United States Postal Service, a change is being made today to the
FY 2009 NPA Core Requirements:

“Reduce Sick Leave Usage” will be removed
as an option for employees when selecting Core Requirements. This
Core Requirement is being removed at the request of and through the Consultative
process with NAPS.

Employees who selected this Core
Requirement will be notified via email that their Core Requirements have
been returned and they will need to select a different Core Requirement.
The Postal Service will provide additional information on how to change
your selection of Core Goals due to the removal of Sick Leave as a Core
Goal.

National Association
of Postal Supervisors Legislative and Regulatory Update - November 13,
2008

In This Issue:

The Future
is Now, USPS Seeks to Realign Its Retiree Health Benefit Obligations

Leadership
Changes in Postal Oversight Committees Possible

Looking for
Tickets to the Inauguration?

Transition
Quick Links

The
Future is Now, USPS Seeks to Realign Its Retiree Health Benefit Obligations
Looking to defray its
operating costs, the Postal Service is seeking quick Congressional relief
from its obligation to pre-fund future retiree health benefits, by redirecting
a portion of the amount it pays for future retiree health
benefits costs to cover its current employer's share for
retiree health benefit premiums. The Postal Service is seeking Hill
approval of the payment arrangement before the end of the 110th Congress.
USPS payments for future retiree health benefits represent a considerable
financial obligation. In FY2008, USPS made a $5.6 billion payment
into the Retiree Health Benefits Fund (RHBF) to pre-fund retiree health
benefits. The arrangement the USPS is pushing on Capitol Hill would reduce
the amount the Postal Service pays into the RHBF by $2.3 billion in FY
2009, and $28.1 billion through 2016. The Postal Service's pre-funding
payments after 2016 would grow in order to make up the difference. Currently,
the Postal Service pays approximately $2.3 billion a year to OPM for the
employer share of health benefits for retired postal workers, and approximately
$5.4 billion annually into the RHBF for future retiree health benefits.
The pre-funding rearrangement was imposed by the
Postal Act of 2006 in order to assure that the Postal Service retained
the means to satisfy its massive future retiree health benefit obligations,
especially in light of the escalating costs of health care and uncertainty
over future USPS finances. There is good reason for changing the
funding arrangement, given the financial crisis the Postal Service faces.
Reflecting the deepening recession, the Postal Service
announced today that it had experienced its largest single-year decline
in postal volume in its history. USPS Chief Financial Officer Glen
Walker
reported to the Board of Governors that postal volume was down by
9.5 billion pieces from 2007 levels, a decline of 4.5%. Standard
Mail dropped 4.3%, Shipping Services fell 3.3%, and Periodicals edged
downward 2.2%. The Postal Service ended FY08 with a $2.8 billion net loss,
aggravated by the $5.6 billion payment required by the Postal Act of 2006
to pre-fund retiree health benefits. The good news was that the
Postal Service continued to improve national on-time First-Class Mail
delivery performance, reaching record highs in FY 2008. Due to cutbacks
in overtime and shift schedules, the Postal Service also reported that
it reduced work hours (which constitute a hefty portion of postal costs)
by 50 million work hours. Looking ahead to 2009, Walker indicated that
the worsening economy will add more red ink to the USPS bottom line, forcing
volume downward by another 8 billion pieces. Walked also indicated
that USPS will pursue an "unprecedented focus on across-the-board cost
reductions." Leadership Changes of Postal Oversight Committees Possible

Dramatic
changes in the leadership of the Congressional committees that oversee
the Postal Service could come about next week, when Congress returns to
Washington for a lame duck session and party caucuses meet.

Committee
chairmanships are put to a vote of the party membership in each legislative
chamber by a secret vote, after recommendations have been made by the
party's leaders.

Waxman's
challenge for the E&C chairmanship marks a major showdown between two
Democratic powerhouses, with implications for a host of major legislative
initiatives next year, from health care to global warming to renewable
energy.

The contest
has highlighted an ideological rift within the Democratic party and its
senior leaders. Dingell's close ties to Detroit automakers and utilities
have continually put him at odds with the party's liberal leadership,
including
House Speaker Nancy Pelosi (D-CA) over climate-change initiatives
such as higher fuel efficiency standards for cars and caps on carbon emissions.
Waxman has been tenacious in his leadership of the House Oversight and
Government Reform Committee, using the wide authority of the committee
to scrutinize the Bush Administration, pursue inquests into its conduct
of the Iraq war, White House political operations and regulatory failures
behind the financial collapse.

In the Senate,the
chairmanship of the Senate committee that oversees the Postal Service
-- the Homeland Security and Governmental Affairs Committee -- could shift,
but that outcome is far from certain. Some Senate Democrats have
called for the ouster of
Sen. Joe Lieberman (ID-CT) from the committee chairmanship, due to
his attacks against President-elect Obama during the presidential campaign
and his endorsement of Republican nominee
Sen. John McCain (R-AZ).

If Lieberman
loses the HSGAC chairmanship, next in line is
Sen. Carl Levin (D-MI), but Levin is considered unlikely to give up
his chairmanship of the Armed Services Committee. Levin is followed
in seniority by
Sen. Daniel K. Akaka (D-HI), although Akaka would have to give up
his current chairmanship of the Veterans' Affairs Committee. That
means that the HSGAC's fourth-highest-ranking Democrat,
Sen. Thomas R. Carper (D-DE), who currently chairs the postal oversight
subcommittee, could vault to the full committee's lead post.

Sen. Susan Collins (R-ME), who was reelected to a third Senate term
last week, is expected to remain the ranking Republican on the HSGAC,
though her name has been mentioned as a potential pick by the Obama Administration
to the Homeland Security Department cabinet post.

In the Senate,
with the pickup of six, and potentially nine seats once all the votes
are counted, Democrats will be able to add at least one extra seat to
their majority on every committee. If they were to win all three
of the undecided Senate races, they could make an argument to increase
their committee majority from two seats to three, but Republicans have
the ability to filibuster any organizing resolution setting committee
ratios.

Either way,
Republicans could try to expand the total number of Senators permitted
to sit on committees so their members could preserve their seats. If the
total number of seats on each panel remained the same, many less-senior
Republicans would be forced to give up their committee assignments to
make room for the larger Democratic majority.

Looking
for Tickets to the Inauguration? Landing a seat at President-elect
Barack Obama's inaugural swearing-in ceremony on January 20 has become
the hottest ticket in Washington, the Washington Post
reports.

Tickets
to the swearing-in ceremony are being distributed by House Members and
Senators of the 111th Congress. If you're interested in getting
a ticket to the Inauguration, contact your House Member or Senator.
Some are still taking constituent requests. Others, due to the high
volume of requests already received, are no longer accepting requests.

National Association
of Postal Supervisors Legislative and Regulatory Update - November 12,
2008

Election
Results Could Mean Change for the Postal Service
We have witnessed history. A Democratic electoral headwind swept
Sen. Barack Obama into the White House and significantly widened that
party's majorities in both chambers of Congress. As we look toward
Inauguration Day and the start-up of the 111th Congress, here’s what an
Obama White House and a larger Democratic majority in Congress could mean
for the Postal Service, its workforce and retirees. The Economy and
Postal Service Finances. Congress and the White House will devote
their foremost attention over the coming months to curing a sick economy
and restoring jobs. For the Postal Service, the sooner the economy returns
to normal, the sooner the Postal Service’s finances will become more stable.
Postal volume has been in near freefall over the past year as the recession
has worsened, falling by 9 billion pieces to 1977 levels. It is
likely to decline even more in coming months. Credit card companies
are expected to send a billion fewer unsolicited offers to consumers by
the end of the year, dropping from 5.2 billion offers last year, according
to the
Washington Post. The Postal Service will continue to spill red
ink in 2009, on top of the $3 billion loss in 2008. These financial
pressures, until the economy returns to health, will continue to prompt
greater USPS cost cutting and job shedding. The return of the financial
health of the Postal Service indeed depends in large part upon the success
of the nation’s economic recovery. Postal Service Retiree Health Benefits
Fund Payments. As a result of financial pressures, the Postal
Service is expected to seek early next year to gain Congressional approval
of a change in the payment schedule, imposed by the
2006 Postal Act, that requires the Postal Service to pay $5.4 billion
annually into a fund for the future retiree health benefits of today’s
workers. These payments are in addition to the $2.3 billion that the Postal
Service annually pays as its employer share for current retiree health
benefits. The thinking is that if the Postal Service’s payment schedule
for future retiree health benefits were revisited and spread out over
a longer term, lowering annual USPS costs, that its financial health would
be strengthened, without harming retiree health benefits. FEHBP.
Although the timeline may be pushed back, the Obama White House is still
expected to try to make good on its promise to install a national health
care plan, one that, in
Obama’s words, is “based on benefits available to members of Congress.”
That plan to which Obama referred, of course, is the FEHBP, which covers
nine million federal and postal employees, retirees and family members,
not merely 535 members of Congress. As the Obama Administration and the
Congress craft a health care reform plan, the primary challenge for NAPS
and the federal and postal employee and retiree community will be to assure
that any national health care plan that comes about is one that runs parallel
to FEHBP, and does not absorb FEHBP into a national plan, consolidating
its participants and risk pool. Otherwise, health care costs for
federal and postal employees and retirees would skyrocket upward.
Medicare Part D. An Obama White House may be more receptive
to assuring that the Postal Service receives the rebate for the Medicare
Part D prescription coverage that USPS makes available to postal retirees,
a reimbursement that could provide several hundred million dollars annually
to the Postal Service. The Bush Administration had
opposed USPS efforts to permit the Postal Service to receive the rebate,
which is made available to all employers who provide prescription coverage
directly to their retirees.
Voting by Mail.
The expansion of voting by mail – which could provide additional volume
and income to the Postal Service – is likely to pick up steam in 2009.
During the past election, more than 25 million voters cast ballots in
states where early voting was allowed, including no-excuse absentee balloting,
providing convenience for voters and averting overwhelming turnout at
some poll locations. The tidal wave of early voters in the recent election
may prompt Congress to mandate voting by mail in future elections, at
least in federal races. Twenty-eight states now allow voters to cast absentee,
mail-in ballots without providing an excuse. Oregon administers
its elections entirely by mail. Some states, like California, permit
voters to have their absentee ballots sent to their homes for every election.
During the last Congress, legislation (H.R.
281 ) that would have forced all states to offer no-excuse mail-in
balloting stalled. Although the legislation is likely to be reintroduced
in the 111th Congress, its major obstacles are Republican fear that absentee
voting will provide a partisan advantage to Democrats (a misguided fear)
and the control that states have over deciding voting procedures. That’s
why NAPS will continue its efforts in the 111th Congress , but in addition
also pursue voting by mail legislation in a dozen or so states (New Jersey,
New Mexico, Ohio, Florida, Montana, Minnesota, Michigan, Maryland, Virginia,
North Carolina, Nevada, Pennsylvania, Idaho, and Utah) in league with
other postal employee organizations and the Voting by Mail Project.

Bruce Moyer NAPS Legislative Counsel

National Association
of Postal Supervisors Legislative and Regulatory Update - October 30,
2008

NAPS
and Postmaster Organizations Say “No” to Pay Concessions
The three postal management organizations today informed the Postal Service
that they will not agree to either forego or defer the upcoming NPA payouts
scheduled for January 2009. During a meeting with the Postal Service and
in a
joint letter, the presidents of the National Association of Postal
Supervisors, the National Association of Postmasters of the United States,
and the National League of Postmasters advised the Postal Service
that USPS did not have the right “to demand that we re-open pay consultations
or change the pay agreement in any way.“ The management organizations
indicated that the overwhelming feedback received from their members supported
retention of the financial recognition of supervisor and postmaster performance,
scheduled for January 2009, and that the payouts cannot be stopped. Meeting
discussions, as recorded in the
meeting minutes, also covered the recent NALC agreement on route evaluations,
District Support positions, Area and District consolidations, Tour Two
plant operations and 10 hour/4 day workweeks The management groups reaffirmed
their commitment to continue to collaborate with the Postal Service on
cost reduction efforts in accord with the organization's mission, and
the groups underscored their readiness to support legislative changes
that reduce the financial burdens of the Postal Service. Postmaster
General Jack Potter in a
Washington Post interview today acknowledged ongoing talks
with Capitol Hill to adjust the timing of the Postal Service's payment
of $5.4B in future retiree health benefit costs, an obligation imposed
by the
Postal Act of 2006. “It requires the Postal Service today to
pay approximately 10 percent of every dollar we take in toward retiree
health benefits,” Potter said.

Bruce
Moyer NAPS Legislative Counsel

National Association of Postal Supervisors Legislative
and Regulatory Update - September 18, 2008

NAPS Celebrates Its Centennial at Successful
Convention in LouisvilleThe National Association of Postal
Supervisors held a successful national convention in Louisville, Kentucky
last week, attended by nearly 1,500 NAPS members, celebrating the 100th
anniversary of the association and addressing a variety of business issues.

Rep. John Yarmuth (D-KY), whose Congressional district
includes the Louisville area, congratulated NAPS convention delegates
at the NAPS 100th anniversary banquet and inserted his congratulatory
remarks in the Congressional Record.

With the excitement of the 2008 Congressional elections
building, NAPS delegates contributed nearly $56,000 to the Supervisors’
Political Action Committee, one of the highest totals ever achieved at
a NAPS convention. So far this year, NAPS has contributed over $100,000
to 90 House and Senate candidates who support NAPS and a strong postal
system. A big THANK YOU to all who contributed to SPAC.

Results of NAPS elections for national, regional
and area officers are here. Other daily convention bulletins and other
convention information are here.

Postmaster General Jack Potter, in his address at
the NAPS convention last week, reported that the Postal Service will lose
more than $2 billion by the approaching end of the USPS fiscal year. “We
are struggling,” Potter said, pointing to declining mail volume and a
weakening economy. “We’re in a dynamic situation, with greater losses
in volume than we’d expected.”

Potter’s remarks to NAPS were similar to those he
delivered in a Public Customer Council broadcast yesterday, warning of
a “perfect economic storm” that threatens to deteriorate mail volume further.
Citing fluctuating oil prices, inflation in paper prices and strife in
financial markets, Potter described the impact of economic conditions
upon USPS as the most difficult since the 1960s, along with the impact
of email and questions about mail’s environmental impact that have led
to a volume decline of 9 billion pieces this year.

“But the economy will bounce back,” Potter predicted
optimistically, “and we have to be ready to adapt,” Potter added.

The Postal Service reported a net loss of approximately
$960 million in August, according to recent reports filed with the Postal
Regulatory commission. While year-to-date revenue is slightly above the
same period last year, revenue for August was about ten percent below
August 2007 in spite of a 2.9% increase implemented in May.

Pointing to a “vigorous debate” going on right now
at USPS headquarters on 2009 mail volume projections, Potter said that
those numbers will influence craft staffing levels, and in turn supervisory
staffing. He noted the possibility of movement to 4-day/ten-hour shifts,
but continued to insist that USPS will not offer financial incentives
coupled with VERAs. “We have to be prudent. In 1992, we paid 46,000 employees
a half-year’s salary to go, then ended up rehiring 70,000,” Potter maintained.

More details on the Postal Service’s financial situation
and possible reorganization will likely be released during next week’s
meeting of the USPS Board of Governors.

In a report last week to Congress, the Government
Accountability Office recommended that the Postal Service incorporate
delivery performance indicators in its pay for performance system.

Pay for performance determines the annual salary
increase for approximately 72,000 EAS and PCES managers and supervisors,
who do not receive the cost of living and “step” increases added to bargaining
unit employee salaries.

GAO recommended that USPS add new delivery performance
indicators to PFP, since existing delivery indicators, like EXFC, apply
to less than one-fifth of mail volume.

GAO said, “As USPS implements requirements of the
postal reform law for measuring delivery performance, it will have opportunities
to incorporate new indicators into its PFP program, notably for timely
delivery of Standard Mail (49 percent of mail volume in fiscal year 2007)
and bulk First-Class Mail (25 percent of volume). Once new delivery performance
measurement systems are fully implemented and mailers’ participation is
sufficient to generate representative data, USPS will be able to incorporate
new delivery performance indicators into its PFP program.” To read the
report, click here.

Bruce Moyer Legislative Counsel to NAPS

National
Association of Postal Supervisors Legislative and Regulatory Update -
August 7, 2008In this Issue:

NAPS
Challenges USPS Network Plan, Questions USPS Outsourcing

Preserve Universal Service
and the Mailbox Monopoly, NAPS Tells the PRC

USPS Announces Greater
Quarterly Loss Than Expected

NAPS
Challenges USPS Network Plan, Questions USPS OutsourcingThe National
Association of Postal Supervisors has questioned the Postal Service's
plans for the use of contracting out in realigning its mail processing
and distribution network and has encouraged Congress to ask the Postal
Service where it's headed in its reliance on private contractors to process
and transport mail. In an
August 5 letter to
Rep. Danny Davis (D-IL), chairman of the
House panel that oversees the Postal Service, NAPS President Ted Keating
challenged the
Network Plan the Postal Service recently sent to Congress and the
Service's lack of explanation of the role it intends outsourcing to play
in modernizing mail processing and transportation activity. Keating
pointed to USPS efforts to contract-out processing and transportation
operations at its Bulk Mail Centers as raising significant policy concerns
that "could represent a significant step toward the privatization of postal
operations." The Postal Service on July 1 issued a
draft Request for Proposal to create a "Time Definite Surface Network"
(TDSN) that envisions outsourcing all mail processing and transportation
activity currently performed by the 21 BMCs within the USPS mail network,
starting with those in Chicago, Cincinnati, Detroit, St. Paul, Atlanta
and Seattle. Bulk Mail Centers are highly mechanized mail processing
plants that distribute parcel post, media mail, standard mail and periodicals
in bulk form. "If BMC activity is ultimately outsourced through the TDSN
initiative, does the Postal Service intend to extend outsourcing to all
of its Processing and Distribution Centers and related transportation
activities?" Keating asked Congress. "What is the ultimate goal?
Is this the first phase of wider reliance on privatization of mail processing
and distribution? Does the Service ultimately intend to contract
out all processing and distribution of mail, if it believes that service
standards and customer service can be maintained at acceptable levels?"
Keating also took aim at the
USPS Network Plan itself, criticizing USPS for providing few new details
to Congress, which mandated in the 2006 postal reform law that the Postal
Service provide a comprehensive report on how intended to modernize the
processing/transportation backbone of the postal network. Keating
called the plan the USPS sent to Congress a "strategy without a destination."
"The Postal Service's faith in a 'fluid approach' toward network realignment,
as evidenced in the Network Plan," Keating said, "is largely a continuation
of the zigzagging we have witnessed since 2001, from the Network Integration
and Alignment program, to the Evolutionary Network Development program,
to the most recent efforts involving ill-fated Regional Distribution Centers."
"There is one potentially distinct difference in the latest iteration,
however," Keating warned. "The single-most important development
in the Network Plan is the one whose possible consequences are left the
most unaddressed. Left unanswered is the role of outsourcing in
the Postal Service's vision of network realignment and whether the Service
intends to apply outsourcing toward the entirety of its processing and
distribution operations ..." "We regard these omissions as flaws
in the transparency and completeness of the Network Plan, as well as the
creation of understanding by the Postal Service stakeholders and the public
of the implications of these steps." Keating encouraged the Postal Service
to provide answers to the Congress and postal stakeholders, including
the
Postal Regulatory Commission, and explain the relationship between
the TDSN outsourcing initiative and future efforts to modernize and cut
costs in USPS processing and distribution centers and other facilities
in the mail network. The potential for USPS outsourcing to private contractors
of the responsibility for processing and distribution of mail, in light
of stalled USPS efforts to privatize mail delivery, holds huge implications
-- both financial and political -- for the USPS, not to mention its 700,000
employee workforce. There are well over 300 processing and distribution
plants in the Postal Service's mail network, providing jobs to tens of
thousands of postal workers and economic heft to the surrounding communities
in which the plants are located. At the same time, considerable
excess capacity in many plants exists, worsened by the continued decline
in mail volume, likely necessitating further facility consolidations and
closures, even if the work continues to remain within the Postal Service.
At a
July 24 hearing of the House Subcommittee on the Federal Workforce,
Postal Service and the District of Columbia on the USPS Network Plan,
Subcommittee Chairman Danny Davis in his
opening remarks focused on the need for USPS to adopt a smarter approach
toward downsizing the postal network, saying, "For this effort to be successful
the Postal Service MUST do a better job of realigning its processing and
transportation networks, improve the data used in its computerized and
statistical modeling, and minimize service disruptions. Failure
to prevent and predict service problems will result in poor mail delivery,
which in turn will anger the public and trigger political considerations."
Preserve Universal Service and the Mailbox Monopoly, NAPS Tells
the PRCUrging the Postal Regulatory Commission to listen to the
scores of witnesses over the past two months who have urged the continuation
of current national policy that guarantees postal service to all Americans,
no matter where they live or work, NAPS President Ted Keating last week
told the Postal Regulatory Commission that "there is broad public consensus
for the preservation of the universal service obligation and the postal
monopoly." Keating's remarks were part of
comments filed by NAPS with the Commission, in connection with the
PRC's inquiry (Pl2008-3) into the future of the universal service obligation
and the USPS monopoly on First-Class Mail. The PRC is required by
the 2006 postal reform law to report to Congress by December 19 on its
findings and recommendations growing out of its inquiry. Keating also
encouraged the PRC to affirm the value of six-day mail delivery.
"Unless the Commission finds that there are cost savings and collateral
merit so significant as to convincingly demonstrate the viability of an
alternative delivery schedule," Keating said, "six-day delivery should
also remain the norm." "The public expects no less." Noting that
FedEx and the National Newspaper Association had urged the PRC to relax
the mailbox monopoly and permit homeowners to indicate whether they would
like to receive unstamped mail from registered companies in their mailboxes,
Keating urged the Commission to turn down that approach and "affirm and
maintain the privacy and integrity of the mail through preservation of
the mailbox rule." That approach, which gives USPS exclusive access
to all mailboxes, would extend the same policy that the Congress and the
President embraced in enacting the 2006 postal reform law, Keating noted.
USPS Announces Greater Quarterly Loss Than ExpectedA continued
decline in mail volume, aggravated by a national economic slowdown and
higher fuel prices, pushed the Postal Service further into the red for
the last quarter, the USPS
announced yesterday. The loss mirrors what's been going on in
the
logistics and mailing industry and throughout the nation. The
USPS ended its third quarter (April 1 - June 30) with a greater-than-expected
loss of $1.1 billion. Mail volume dropped by 5.5 percent compared
to the same period last year. First-Class Mail and Standard Mail
volume were each down 5.5 percent, reflecting the "challenging economic
environment," USPS said. "When the economy does rebound, mail volume may
not return to previous levels," Postmaster General John Potter warned
in a statement. "This requires that we significantly accelerate
process improvements and the realignment of resources in order to achieve
long-term financial success. Failure to do so will threaten our
ability to meet our mission of providing universal service at affordable
prices." While USPS operating expenses inched upward only 1 percent for
the quarter, despite substantial increases in gasoline costs, operating
revenue fell by nearly 2.4 percent, a decrease of $437 million compared
to the same period last year. The good news was that on-time delivery
performance reached record highs for all categories of First-Class Mail
tracked by the Postal Service. Overnight service was 97 percent
on time, up from 96 percent in the same period last year. Financial uncertainties
further prompted the Postal Service to refrain from announcing a pricing
structure for its use of the Intelligent Mail Barcode, which USPS continues
to promise will be ready for use by mailers in May, 2009. " ...
[G]iven the volatility of the economy, decreasing mail volumes and our
own financial situation, it would be premature for us to commit to a pricing
structure for the Intelligent Mail barcode at this time," Tom Day, Senior
Vice President, Intelligent Mail and Address Quality
told the
Mailers' Technical Advisory Committee yesterday. For the Postal Service,
Intelligent Mail and the underlying
intelligent mail barcode is the greatest thing since sliced bread.
It is expected to revolutionize the way USPS accepts, processes and transports
mail, by informing mailers when a piece of mail enters the mail stream
and journeys through the postal network and into the hands of the intended
recipient. Bruce Moyer Legislative Counsel to NAPS

National
Association of Postal Supervisors Legislative and Regulatory Update -
July 31, 2008

House
Approves FERS Sick Leave and Thrift Savings Reforms

The House
of Representatives has approved legislation
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.01108: that would
give employees covered under the Federal Employees Retirement System largely
the same retirement credit for unused sick leave as already applies to
workers covered under the older Civil Service Retirement System.
Also included in the House-passed measure are improvements to the Thrift
Savings Plan. The conferral of FERS sick leave credit has been a
legislative goal of the National Association of Postal Supervisors.

The FERS
sick leave approach approved by the House last night is more generous
than that originally proposed in FERS sick leave legislation
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05573: introduced
earlier this year by Rep. James Moran (D-VA)
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR06500:@@@L&summ2=m&.
Under the measure approved by the House, FERS employees who retire within
three years of the bill's enactment would receive service credit, in the
computation of their pension, for 75 percent of their accrued sick leave
at the time of retirement. Those who retire three years after enactment
would receive 100% credit for all of their unused sick leave. Moran's
original proposal would have provided a cash payout to FERS employees
of up to $10,000 for unused sick leave.

Delighted
with the more generous approach approved by the House, Congressman Moran
in a statement
http://moran.house.gov/apps/list/press/va08_moran/SickLeavePass.shtml
said, "Our current use-it or lose-it sick leave system for FERS employees
hurts productivity and increases training costs." "We need to be
incentivizing the accrual of sick leave, not encouraging people to call
in sick in the weeks leading up to retirement. With today's passage,
we're putting FERS employees on par with their CSRS colleagues, replacing
a flawed approach to sick leave with one proven to work in everybody's
favor."

The FERS
sick leave provisions were included in a larger measure approved by the
House that would grant the Food and Drug Administration authority over
tobacco products. The bill, the Family Smoking Prevention and Tobacco
Control Act (H.R. 1110
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.01108), was approved
by a 326-102 vote <http://clerk.house.gov/evs/2008/roll542.xml.
It would require the FDA to regulate the labeling and advertising of tobacco
products and ban flavored cigarettes excluding menthol.

The tobacco
measure also includes provisions that would improve the Thrift Savings
Plan, including the automatic enrollment into the TSP of of newly-hired
eligible federal and postal employees and members of the military.
It also would authorize the Federal Thrift Retirement Investment Board
to establish a Roth contribution plan and self-directed investment options
within the TSP. It is the addition of the Roth contribution plan
option that, under Congressional budget scoring rules, would provide additional
federal revenue, making possible the more generous, CSRS-like FERS
sick leave formula. The Roth revenue also offsets the loss of
federal tobacco taxes from an anticipated decline in smoking.

The tobacco
bill, including the FERS and TSP provisions, now moves to the Senate,
where its prospects are uncertain. The bill enjoyed wide bipartisan
support in the House, but few days remain in the legislative calendar,
and Republican leaders and the Bush administration are opposed to the
tobacco provisions. The White House has threatened to veto the bill,
arguing that it would disproportionately tax low-income Americans, through
user fees assessed against tobacco companies to raise funds to underwrite
FDA's regulatory efforts. The Postal Supervisors and other postal
and federal employee groups will continue to push for enactment.

Bruce Moyer

Legislative
Counsel, National Association of Postal Supervisors

National Association of
Postal Supervisors Legislative and Regulatory Update - July 22, 2008In This
Issue:

USPS Announces Early Out Details for Some Supervisor PositionsThe Postal
Service has released details of the voluntary early retirement (VER) offer
for USPS employees in supervisor of distribution operations and supervisor
of customer services positions, as well as clerk and mail handler positions.
The USPS voluntary offer, recently approved by the Office of Personnel
Management, will extend to approximately 20,000 employees -- including
approximately 5,300 EAS employees -- who are at least 50 years of age
with 20 years of creditable federal service or any age with 25 years of
creditable federal service. Eligible employees will have from August
25 to September 30 to accept the VER offer and submit their retirement
application. The effective date of retirement will be January 3,
2009. According to USPS, it will mail an annuity estimate to all
VER-eligible employees on August 18, followed on August 22 by a VER offer
packet containing application materials and further information on the
VER offer. The September 30 due date on the employee's filing of
the VER acceptance paperwork is also the date on which an employee's voluntary
choice to retire will become irrevocable. USPS says that by mid-November,
the Human Resources Shared Services Center will notify employees as to
the status of their VER application.

House
Hearing Will Examine USPS Network Realignment Plans
A House panel will hold a hearing on Thursday, July 24, on Postal Service
plans to realign its processing and transportation postal networks.
The hearing of the House Subcommittee on Federal Workforce, Postal Service
and the District of Columbia, titled "The Three R's of the Postal Network
Plan: Realignment, Right-Sizing, and Responsiveness" will look at the
impact of USPS realignment plans upon the public, the postal workforce,
the mailing industry and the economic health of the Postal Service.
Witness testimony is expected to include an assessment from the Government
Accountability Office, which has been critical of USPS network planning
efforts in the past. NAPS officials will monitor Thursday's hearing,
and may file comments with the Subcommittee on the network realignment
issue if warranted. Over the past two months, USPS has issued
two important documents on network realignment: a network realignment
strategy report, required under the postal reform law; and a draft RFP
for a Time-Definite Surface Network, proposing to realign the Bulk Mail
Centers and outsource to a private contractor the responsibility for sorting
and end-to-end movement of origin-entered Standard Mail and Periodicals,
as well as destination-entered Package Mail. The Postal Service
has indicated that its current processing and distribution facilities
were built when all mail entered the network at origin. Today approximately
three-quarters of all mail is entered at destination, generating excess
capacity. The USPS network strategy document, which revealed few new details,
reaffirmed continuing USPS intent to reorganize its processing and transportation
networks, potentially leading to the elimination of significant numbers
of jobs, starting at airport mail centers and continuing to mail processing
plants and bulk mail centers. USPS did not identify in the report
which facilities it is considering for further consolidation, indicating
only the intent to continue to assess the feasibility of further restructuring
through the use of "recently enhanced" AMP guidelines. The draft
RFP for the Time-Definite Surface Network, issued on July 1, anticipates
USPS award of the BMC-related work through a contract to a single private
sector contractor, with the contractor barred from subcontracting any
portion of the distribution work. The contract would cover eight
years, with the possibility for extensions for another six years.
Activation of the network would occur within 18 months after the contract
was awarded. Comments on the draft RFP by interested parties are
due to USPS by August 1,

PRC Universal
Service Study Could Moot Congressional Inquiry on 5-Day Delivery
Even if Congress commissions a study on the cost-effectiveness of 5-day
mail delivery, as approved recently by the House Appropriations Committee,
that inquiry will be preceded by another, potentially more conclusive
study already underway by the Postal Regulatory Commission, as part of
its report on the universal service obligation and the postal monopoly.
The PRC report is required to be completed and sent to Congress by
mid-December. Congress is not likely to approve a 5-day delivery
study, at the earliest, until February, 2009, when the final version of
the funding bill, in which the 5-day delivery study is tentatively lodged,
comes up for approval, according to the timetable announced by Congressional
leaders. And it is possible that the 5-day delivery study could
be dropped from the final version, especially if the Senate opposes its
inclusion. Ann Fisher, Acting Director of Public Affairs and Government
Relations, confirmed to NAPS that the PRC's report on the universal service
obligation would address the five-day versus six-day delivery issue.
"The extent to which the PRC efforts would overlap any [Congressionally-ordered]
study that might be conducted in response to the Kingston amendment would
depend on the design of that study, " Fisher said in an email. The House
version of the FY 2009 Financial Services and General Government appropriations
measure, as approved by the House Appropriations Committee on June 25,
includes an amendment, proposed by Rep. Jack Kingston (R-SC) requesting
"a report on the cost effectiveness and fuel consumption of a five-day
delivery system and the efficiency and consumer demand of Saturday delivery
services of the United States Postal Service." Kingston said his
amendment was prompted by concern over the fuel use and cost-effectiveness
associated with six-day delivery, According to Kingston, an estimated
$85 million in annual fuel savings would be accomplished by five-day delivery.
Kingston did not estimate how much USPS would actually save in total terms
by a move to five-day delivery. NAPS President Ted Keating, during his
July 10 testimony before the Postal Regulatory Commission at its fourth
and final public hearing on the USO study, strongly urged the continuance
of six-day delivery. "While declining First Class mail volume and
rising fuel costs will require the Postal Service to continue to consider
and undertake measures necessary to assure the core viability of secure,
efficient and affordable mail service, we believe six-day delivery service
should continue," Keating testified. All union and management association
leaders joined Keating in urging the Commission to support the continuation
of universal service as we understand it today -- affordable and dependable
service to every American, six-day-aweek delivery, the mailbox monopoly,
and equal, affordable access to services. Keating reminded the PRC commissioners,
"You have more than 200 years experience on this panel, and I think it's
relevant that postal management and labor are delivering the same message."
Editor's Note: Interestingly, the debate on Capitol Hill surrounding
the future of Fannie Mae and Freddie Mac, the private companies that bolster
the nation's housing market, mirrors in some respects the public policy
tension underlying universal service and study by the PRC. In the
Fannie/Freddie debate, Congress is wrestling with whether to commit billions
of dollars to financially prop up two private corporations whose mission
fulfills a necessary and public purpose in the country's mortgage market.
While the USPS is not a private corporation, the same private operating/public
mission expectations apply to the Postal Service. Though the U.S.
Postal Service is a government corporation, not a private company, it
is expected to fulfill a very public mission. Yet it is also expected
to turn a profit, walk and talk like a private business. Question:
Were the USPS to fail, how many billions of dollars would the Congress
be ready to commit to assure its solvency? Bruce Moyer Legislative
Counsel, National Association of Postal Supervisors

National
Association of Postal Supervisors Legislative and Regulatory Update --
July 7, 2008

In this Issue:

* Postal Service Seeks Early Out Authority as
Restructuring Plans Emerge

* Congress Pursues Pared-Down Agenda

* House Panel Approves Five-Day Delivery Study

* NAPS to Urge Preservation of Universal Service

Postal Service Seeks Early Out Authority as Restructuring Plans Emerge

The Postal
Service reportedly has requested Voluntary Early Retirement Authority
(VERA) -- more commonly known as "early out authority" -- from the Office
of Personnel Management, to seek permission to temporarily lower the age
and service requirements to increase the number of USPS employees eligible
for retirement.

Details on
the VERA request are sketchy, but the pursuit of VERA is not surprising,
given the need for the Postal Service to pursue significant cost-cutting
moves to offset falling First-Class mail volume and rising costs, especially
as soaring gas prices flatten USPS profits.

VERA theoretically
encourages more voluntary attrition in order to permit an agency to pursue
downsizing and restructuring with minimal workforce disruption.
Acceptance rates by Postal employees to early-out offers in past restructuring
efforts have been mixed at best.

According
to unconfirmed reports, the Postal Service will target the next round
of early-out offers to specific areas, but without the aid of buyouts
or additional financial incentives to sweeten their appeal.

The Postal
Service also recently announced plans to continue efforts to reorganize
its processing and transportation networks, potentially leading to the
elimination of significant numbers of jobs, starting at airport mail centers
(AMCs), and continuing to mail processing plants and bulk mail centers.
In a "network rationalization report" released to Congress on June 20,
the Postal Service revealed few details on which facilities would be identified
for further consolidation, indicating it planned to continue to asses
the feasibility of further restructuring through the use of "recently
enhanced" AMP guidelines.

The USPS
also announced in the report that it would continue to explore the potential
of outsourcing the processing and transportation of mail in the
Bulk Mail Center network through its Time-Definite Surface Network program.
As Federal Times recently reported, the Postal Service also may outsource
some BMC sorting functions to private companies, reportedly to free up
space to install Flats Sequence System equipment.

The Postal
Service indicated it could take up to two years to further solicit expert
and public opinion to decide which plants and BMCs to realign.

Congress Pursues Pared-Down Agenda

Congress
returns this week from its July 4th recess, with relatively little time
remaining in the session to accomplish much besides passing housing foreclosure
assistance and terrorism wiretapping bills -- and continue to engage in
partisan sniping as November's elections draw closer.

A "pared-down
summer agenda" is how the Washington Post described the work likely to
get done in the abbreviated election-year calendar, with lawmakers departing
tin August for a month-long break and the two parties' presidential conventions
, followed in September by posturing over FY 2009 budget issues, with
adjournment in early October for the final campaign stretch.

That means
that most, if not all of the issues promoted by NAPS -- from voting by
mail, to Social Security fairness (GPO/WEP), to premium conversion, to
veterans reassignment protection, will likely be punted into 2009 and
the 111th Congress.

House Panel Approves Five-Day Delivery Study

The House
Appropriations Committee has approved an amendment requiring the Postal
Service to study the merits of a five-day delivery system, both in terms
of its cost-effectiveness and its impact on fuel consumption. The
provision was added to the FY 2009 Financial Services and General Government
appropriations measure, approved by the Committee on June 25. The
bill, which includes nearly $112 million in funding for the Postal Service,
now goes to the full House for approval; the Senate has not acted on its
funding bill.

The five-day
delivery study requirement was proposed by Rep. Jack Kingston (R-GA) ,
who in a statement said, "I’ve been trying to get the postal service to
end Saturday delivery for years." "It's a perfect example of government
waste that is driving up the price at the pump. I can't think of
the last time I got anything but a bill in the mail and, frankly, those
can wait until Monday. Now my kids get all of their bills by email.
What other way can the government immediately save 20.8 million galls
of gas thereby reducing consumption and gas prices?"

Kingston,
a conservative Congressman from southeastern Georgia who, during his 16
years in Congress, has crusaded for smaller government, estimated that
the Postal Service would annually conserve nearly 21 million gallons of
gasoline and save $85 million on fuel costs through five-day delivery...
"This is just one way to bring down the cost of fuel," Kingston said.
"While some oppose this idea, this study will at least give us hard numbers
on which we can make an informed decision."

The Congress
has mandated that the Postal Service provide six-day delivery to all parts
of the country since 1983, through a requirement inserted in annual appropriations
measures. Even if Congress refrained from continuing the six-day-delivery
requirement, and the USPS sought to move to five-day delivery, the Postal
Regulatory Commission would still need to approve the change.

NAPS to Urge Preservation of Universal Service

NAPS President
Ted Keating on Thursday will urge the Postal Regulatory Commission
to lend its support to the preservation of the universal service obligation
and the postal monopoly. Keating's remarks will call upon the Commission
to affirm the well-established principle that all Americans, no matter
where they live, are entitled to secure, efficient and affordable postal
service.

Mr. Keating
will appear with the presidents of several other postal employee organizations
before the Commission at a hearing at the PRC's headquarters on Thursday
morning, July 10. The hearing is the fourth of a series of hearings
the PRC has held around the country, as it prepares its study on the universal
service obligation and the postal monopoly. The report, due to Congress
in mid-December, is required by the Postal Accountability and Enhancement
Act.